Behind the numbers: Pandora's payments to artists

Earlier this week we reported on Pandora CEO Tim Westergren noting that the company pays some of the top artists in the world over $1 million per year in royalties, with Lil Wayne and Drake topping the list at $3 million per year.

Additionally, the exec mentioned that over two thousand artists were making $10,000 or more per year.

Today, Billboard took a look behind the numbers, which appear to be a bit misleading.

While the artists do make money from Pandora, Pandora pays SoundExchange which then gives the money to the artists. SoundExchange gives artists 45 percent of net royalties, while the record labels get 50 percent. The other 5 is given to session musicians and any backup singers. SoundExchange takes 5.3 percent off total revenue to start to get to net royalties.

That being said, for the example of Drake, while net royalties may be $3 million, the rapper will see $1.35 million.

While those figures are still nice for the larger artists, it is less than Pandora originally suggested.